Everyone knows that the housing market has been a little daunting for the last several years. Ups and downs, talk of good news and bad news, and a confusing amount of information about rising and falling mortgage rates has rendered the market all but inaccessible for a lot of prospective buyers.
Good news! Times are changing.
Whether you want to buy a home as your long-term residence or as an income property, things are looking up. Remarkably low mortgage rates are making houses more affordable than they have been in decades. Of course, lately, one of the greatest concerns facing you as a prospective homebuyer is whether you can secure that low rate mortgage in the first place. Lenders have tightened standards, requiring steeper down payments and stricter scrutiny of credit scores. But some economists think that might be changing as well. Do you have good credit? A down payment? A steady job? These are all factors that might play in favor of your ability to secure an attractive mortgage rate.
Conventional wisdom has long suggested that owning is better than renting. Renters have been viewed as “throwing money away” because they aren’t accruing equity in a property. However, with shifting interest rates and high property costs, in recent years, renting hasn’t necessarily been a bad option. As a result of the recent housing downturn, many prospective owners have been renting rather than buying.
There is a shift going on right now as the market is trending in favor of buyers. House payments are becoming more affordable than any time in recent history. Homeowners can get more for their money: bigger houses for some—or smaller payments for those willing to buy more moderately.
Whether you’re in a position to buy a home you are going to settle into for the long term, or whether you’re looking for a profitable investment, due diligence is key. For investors, the recently popular practice of “flipping” a property should be approached with the greatest amount of caution, knowledge, and savvy. Now might not be the time to try to make money on a quick turnaround.
Investing in real estate has long been a profitable and rewarding endeavor. Just don’t forget to do your homework! You should also take the opportunity to call on an expert. Buying a home can be one of the most valuable investments of your lifetime, so, as you would with any other important decision, gather as much knowledge as possible and lean on the people with the knowledge to help. A local REALTOR® with experience in your target market will be able to show you comparables. Most will have the inside scoop on the communities in addition to being able to point out any nuances that you might not easily find on your own, or through internet research. When interest rates are low and home prices are also low, it is a great time to buy!
Peggy Patenaude is a leader in real estate sales in the Andovers, an affluent suburb of Boston.
